Falcon's Beyond Global Announces Filing of Information Statement Relating to Mandatory Exchange of Warrants Aimed at Simplifying the Company's Capital Structure

Rhea-AI Summary

Falcon's Beyond Global (NASDAQ: FBYD) has filed a definitive Information Statement with the SEC regarding the mandatory exchange of public warrants for Class A common stock. The exchange, scheduled for October 6, 2028, will convert warrants at a ratio of 0.25 shares per warrant. The amendment, authorized by over 50% of warrant holders, becomes effective on January 14, 2025.

After the effective date, warrants will no longer be exercisable and will only entitle holders to receive shares at the fixed exchange ratio. While the warrants are expected to remain listed on Nasdaq until the exchange date, continued listing post-effective date isn't guaranteed. The exchange ratio will adjust for stock splits and similar events but won't reflect the stock dividend declared on September 30, 2024.

Positive

• Simplification of capital structure through warrant conversion
• Reduction in potential future dilution for stockholders
• Majority warrant holder support (over 50%) for the amendment

Negative

• Warrants will become non-exercisable after January 14, 2025
• Uncertainty about continued Nasdaq listing of warrants post-effective date
• Fixed exchange ratio of 0.25 shares per warrant may limit upside potential

Insights

Financial Analyst

This capital structure simplification through mandatory warrant exchange represents a strategic financial move. The 0.25:1 exchange ratio effectively reduces potential dilution by 75% compared to a full warrant exercise. The fixed exchange date of October 6, 2028, provides clarity for investors and removes uncertainty around warrant exercise timing. By eliminating warrants from the capital structure, the company gains more flexibility in future financing options. However, warrant holders lose potential upside if the stock price significantly exceeds the original exercise price before the exchange date. This mandatory conversion also suggests management's confidence in long-term value creation, as they're willing to commit to a fixed exchange ratio nearly four years in advance.

Legal Expert

The mandatory warrant exchange, approved by over 50% of warrant holders, demonstrates proper corporate governance and compliance with securities regulations. The filing of Schedule 14C and the 20-business-day notice period before effectiveness ensures transparency and adequate disclosure to security holders. The amendment includes important protections for warrant holders through anti-dilution adjustments post-effective date, though notably excludes the December 2024 dividend adjustment. The continued Nasdaq listing of warrants until the exchange date maintains liquidity for holders, subject to listing requirements. This structured approach to capital restructuring aligns with SEC requirements while protecting stakeholder interests.

ORLANDO, Fla.--(BUSINESS WIRE)-- Falcon’s Beyond Global, Inc. (Nasdaq: FBYD) (“Falcon’s Beyond,” “Falcon’s,” or the “Company”), a leading innovator in immersive storytelling through its divisions Falcon’s Creative Group (“FCG”), Falcon’s Beyond Destinations (“FBD”), and Falcon’s Beyond Brands (“FBB”), today is pleased to announce that it has filed with the Securities and Exchange Commission its definitive Information Statement on Schedule 14C (the “Information Statement”) pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended. The purpose of the Information Statement is to notify holders of the Company’s publicly-traded warrants (the “Warrants”) of the mandatory exchange of the Warrants on October 6, 2028 (the “Exchange Date”) for shares of the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”) at an exchange ratio of 0.25 shares of Class A Common Stock per Warrant (the “Exchange Ratio”). The Company mailed the Information Statement to the holders of the Warrants on December 13, 2024.

The mandatory exchange is pursuant to an amendment dated November 15, 2024 to the warrant agreement, dated November 3, 2023, by and between the Company and Continental Stock Transfer & Trust Company, the Warrant Agent. The amendment was authorized by holders of more than 50% of the Warrants.

This initiative simplifies the Company’s capital structure and provides an opportunity for Warrant holders to convert their holdings into equity in Falcon’s Beyond at a fixed exchange ratio.

“We are pleased to announce the Warrant exchange as part of our efforts to simplify our capital structure. It’s great to see Warrant holders actively working with us to achieve an amendment that we believe benefits to both the Company and its Warrant holders by increasing the chances that all Warrant holders receive an economic benefit from their Warrants, improving the probability of economic accretion to our stockholders by reducing the potential dilutive impact of the warrants, thereby providing us with more flexibility for financing our operations,” said Simon Philips, President of Falcon’s Beyond. “This action underscores our commitment to maximizing stockholder value and reflects our focus on creating an environment conducive to supporting the chances of long-term stock price appreciation.”

The Amendment will become effective on January 14, 2025 (the “Effective Date”), the next business day following the twentieth business day after the mailing of the Information Statement to the holders of the Warrants. From the Effective Date until the Exchange Date, the Warrants will no longer be exercisable and will only entitle holders to receive shares of Class A Common Stock at the Exchange Ratio on the Exchange Date. The Warrants are expected to remain listed on Nasdaq until the Exchange Date, although continued listing after the Effective Date cannot be guaranteed.

After the Effective Date, the Exchange Ratio will be appropriately adjusted in the event of any stock dividend, stock split, consolidation, combination, reverse stock split, or reclassification of shares of Class A Common Stock or other similar event. The Exchange Ratio will not be adjusted after the Effective Date to reflect the stock dividend declared by the Company on September 30, 2024 and payable on December 17, 2024.

For more information and the detailed description of the Amendment, see the Definitive Information Statement on Schedule 14C, filed by Falcon’s with the SEC on December 13, 2024.

About Falcon’s Beyond

Falcon’s Beyond is a visionary innovator in immersive storytelling, sitting at the intersection of three potential high growth business opportunities: content, technology, and experiences. Falcon’s Beyond propels intellectual property (IP) activations concurrently across physical and digital experiences through three core business units:

• Falcon’s Creative Group creates master plans, designs attractions and experiential entertainment, and produces content, interactives, and software.
• Falcon’s Beyond Destinations develops a diverse range of entertainment experiences using both Falcon’s Beyond owned and third party licensed intellectual property, spanning location-based entertainment, dining, and retail.
• Falcon’s Beyond Brands endeavors to bring brands and intellectual property to life through animation, movies, licensing and merchandising, gaming as well as ride and technology sales.

Falcon’s Beyond also invents immersive rides, attractions, and technologies for entertainment destinations around the world.

FALCON’S BEYOND and its related trademarks are owned by Falcon’s Beyond.

Falcon’s is headquartered in Orlando, Fla. Learn more at falconsbeyond.com.

Falcon’s Beyond may use its website as a distribution channel of material Company information. Financial and other important information regarding the Company is routinely accessed through and posted on our website at https://investors.falconsbeyond.com.

In addition, you may automatically receive email alerts and other information about Falcon’s when you enroll your email address by visiting the Email Alerts section at https://investors.falconsbeyond.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, words such as “will”, “expected” and similar expressions identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those expressed in or implied by the forward-looking statements, including (1) our ability to maintain the listing of our Warrants on Nasdaq or to list the shares of Class A Common Stock issuable upon the Exchange on Nasdaq; (2) the concentration of share ownership and the significant influence of the Demerau Family and Cecil D. Magpuri, (3) our continued compliance with Nasdaq continued listing standards, (4) risks related to our Up-C entity structure and the fact that we may be required to make substantial payments to certain unitholders under our Tax Receivable Agreement, and the risks disclosed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on April 29, 2024, and the Company’s other filings with the Securities and Exchange Commission. The forward-looking statements herein speak only as of the date of this press release, and the Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216403272/en/

Media Relations:

Kathleen Prihoda, Falcon’s Beyond

kprihoda@falconsbeyond.com

Investor Relations:

ir@falconsbeyond.com

Source: Falcon’s Beyond Global, Inc.

FAQ

What is the exchange ratio for FBYD warrants in the mandatory conversion?

The exchange ratio is 0.25 shares of Class A Common Stock per warrant.

When will FBYD's warrant mandatory exchange take place?

The mandatory exchange is scheduled for October 6, 2028 (the Exchange Date).

When does the FBYD warrant amendment become effective?

The amendment becomes effective on January 14, 2025.

Will FBYD warrants remain tradeable on Nasdaq after the amendment?

While warrants are expected to remain listed until October 6, 2028, continued listing after January 14, 2025, cannot be guaranteed.

How will stock splits affect FBYD's warrant exchange ratio?

The exchange ratio will be appropriately adjusted for any stock splits, consolidations, combinations, or similar events after the effective date.